Kolkata, Jul 4 (PTI) The proposed Market-Based Economic Dispatch (MBED) policy by the power ministry will benefit consumers and reward performing plants of the country, experts said on Sunday.

With distribution companies getting out of long term power purchase agreements (PPAs) and the role of energy exchanges gaining momentum, the proposed policy is expected to resolve the existing issues of the performing and environment-friendly plants.

"The initiative taken by MoP for switching to MBED is a welcome move. We are hopeful that this will result in the dream of one price across the country though it seems impossible as on date," former West Bengal Electricity Regulatory Commission chairman R N Sen said.

The power ministry believes that the proposed MBED mechanism would be a key step for transitioning towards "One Nation, One Grid, One Price".

"The policy aims to pool all the generating stations into one and scheduling will be done based on merit. This will reward the performing plants," DVC member secretary PK Mukhopadhyay told PTI.

The phase-1 of MBED will commence on April 1, 2022 with the thermal fleet of NTPC plants to test the efficacy of the mechanism.

Considering the total power generation of 1,393 billion units in the country with a weighted-average power price of Rs 2.36 kWh, the savings from the proposed mechanism would be 3.74 per cent, amounting to Rs 12,295 crore.

Once phase-I commences, the entire demand from NTPC stations will be met by dispatching the least-cost generation mix while ensuring that the grid's security is maintained.

As a result, cheaper NTPC's power will be dispatched to the maximum extent, whereas costlier projects will run optimally as required.

Currently, power distribution companies do not have cheaper options outside the states, and several low-cost generation capacities remain sub-optimally utilised.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)